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Will Nicaragua real estate be the future for many baby boomers?

How might Nicaragua real estate benefit from a generation of retirees?  That discussion begins with an analysis of the U.S. market.  Real estate is cyclical, though the U.S. has experienced extended periods of positive price appreciation.  Taking any 10 to 20 year period, the U.S. home price indexes will look a lot like a stock market chart for the same duration.  The trend has been for price appreciation over the long term.

In the period from around 2005 through 2015, there will be a huge number of baby boomers ending their primary careers and looking for their dream retirement situation and location.  The financial abilities of this group will be quite diverse, with many finding it necessary to continue in some form of income-producing capacity while attempting to eke out some enjoyment in their later years.

The boomer generation is generally more ambitious than their parents.  With high prices for homes in the desirable retirement areas of the U.S., and the surge in demand within a relatively short time span, where might this group find the quality of life they desire in their retirement?  Could Nicaragua real estate benefit?  What factors might influence their decisions?

• Many will still need a source of income not provided by their investments and savings.
• This group wants to stay involved in life and most will want a second career or meaningful activity.
• Entrepreneurial aspirations are high on the list of many who worked for someone else their entire careers.
• This group has traveled more extensively than their parents.

REITs, or Real Estate Investment Trusts, have gained in portfolio exposure starting around 1999.  The CIOs, Chief Investment Officers, of these trusts are looking more at investments outside the borders of the U.S. In the late 90’s through 2006 or so, the hot areas for investment were Europe and Asia.  South America lagged behind significantly.  However with more stability and infrastructure, it’s now a target for some of the larger REITs.  They see a growth potential, and a part of that is the construction of shopping malls, hotels and business complexes to support the growth of a more affluent population.  Does that sound like Boomer retirees?  What might attract this group to real estate in Nicaragua?

• A stable democratic government well-past previous unrest
• Laws that put foreign property ownership on par with local rights
• Most property owned fee-simple with title insurance available
• Tax incentives for foreign investment and relocation
• Excellent tax incentives for those starting a business
• Homes and land still priced attractively, not yet fully discovered
• Word is getting out about the beauty, lifestyle and economic benefits

“Real estate is local” is the mantra of the industry.  That’s very true in many respects.  However, when it comes to deciding where one will spend their “golden years”, it’s important to think globally in today’s world.  Will Nicaragua real estate be a focus for Boomer retirees?  There certainly are a number of very good reasons for a close look.

Article by Jim Kimmons, a Taos real estate broker and internet freelance writer.

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